Popular Inc. (BPOP) outlined a tightened profitability framework and expanded capital return program at the Barclays 24th Annual Global Financial Services Conference, underscoring a strategic pivot under new CEO Jorge J. García.
The San Juan-based bank set a return on common equity target of 14% to 17%, replacing a broader double-digit goal. Management said the institution is currently operating near the upper end of that range, alongside a common equity tier 1 ratio of approximately 16%.
García announced a quarterly dividend increase to $0.90 per share and a $1 billion share repurchase authorization. Between $300 million and $400 million is expected to be deployed in buybacks over the remainder of the year, bringing total capital returns through dividends and repurchases close to 100% of the prior year’s net income. Expense reductions totaled about $50 million this year and are projected to reach $70 million cumulatively next year.
Loan growth is guided to the low end of a 3% to 4% range, while deposit growth in Puerto Rico is expected to remain modest at 1% to 2%. The bank also highlighted a corporate credit card product launched late in the first quarter that saw strong uptake in the second quarter.
On the balance sheet, Popular faces limited growth drivers in Puerto Rico, where the population has declined about 10% over the past decade. However, unemployment sits at historic lows, workforce participation has risen, and wage growth has helped offset inflation. Manufacturing accounts for 40% to 50% of the island’s economy, anchored by pharmaceutical and biotech activity. Approximately $3 billion in announced pharmaceutical and biotech investments is underway, García noted.
Construction, leisure and tourism, and warehouse and logistics are emerging as growth sectors, partly funded by federal hurricane recovery dollars and private capital. Tariff-related cost increases have pushed average vehicle prices in Puerto Rico to roughly $48,000 to $49,000, creating demand for auto lending.
García struck a cautious tone on mergers and acquisitions, saying the bank maintains a “really high bar” for any deal. Popular would likely target institutions in the $14 billion to $15 billion market-cap range, but the CEO emphasized the bank is “not naive” about the challenges of accretive transactions in its current environment.
Popular’s stock has climbed 35% year-to-date and 37% over the past twelve months, with a beta of 0.62. Revenue grew 9.4% over the last twelve months, and the company is valued at about $10.6 billion. Deferred tax asset adjustments were last recorded in 2023 or 2024, and the firm’s Focus initiative launched last year amid the leadership transition.
